For many years companies have relied on Excel to do all kinds of tasks. Slowly but surely, this was replaced by planning systems, transport management systems, ERPs, HR software, you name it. In logistics, however, things always work a bit differently and adoption of technology tends to be rather slow. That is why for many companies Excel is still the software of choice for when they run tenders and expect their carriers to follow their own (home-made) Excel structures.
There are however alternatives: cloud-based platforms, which support tender processes just like software in other areas: faster, more efficient and with better results, which is a typical outcome of automation. That is what tender managers need today – and here is why.
Build relationships with carriers
The logistics market has become a seller’s market, and maintaining good relationships with carriers is more important than ever. Finding new carriers has become harder, and building carrier relationships will take more effort than before.
Capacity constraints will force many shippers to spend more time on their carrier networks to ensure reliability, on-time delivery and a reasonable cost level. Shippers must focus more on how their freight volumes impact the carrier’s business – instead of only caring about finding the most attractive prices. They must also realise carriers receive many tenders and spend most time on attractive tenders in whatever form. Tenders run via procurement platforms come across as more professional and take less carrier time than via a manual process.
Logistics teams are too small to be an expert in everything
Shipping globally requires expertise in many different areas and logistics departments have been often understaffed and underfunded to deal adequately with daily challenges. Add the strain of running irregular tender events that require a high level of focus and quite some time to prepare and engage with carriers, and you can easily understand that it is hard to get the maximum value out of a tender which is run as a side show.
The need for flexibility in procurement has never been greater
Covid, Brexit, sanctions, lockdowns, shutdowns, shortages and high prices. This all gets thrown at logistics managers, and somehow they need to deal with that and rely on their carrier network. But there is pressure in the carrier network too and dynamics are high. Opportunities to capture good or acceptable rates are thin and threats of not securing capacity are high. Technology is required to close this gap.
Global complexity was never bigger
Globalisation has been around for a while and we are used to having long supply chains. Yet recent events, such as the ship that got stuck in the Suez canal, prove that long supply chains are also very vulnerable and have a domino effect on regional and even local supply chains. It shows that supply chains must be made more robust, need more visibility and more technology. What does that mean? It means that you need to have access to back-up scenarios, carriers, technology to help make quick decisions, and the means to communicate and to share data with suppliers quickly. Procuring spot shipments in an efficient way, running small local sourcing events, for example, or changing weak partners for stronger ones, require speed and automation.
Reducing complexity in invoice control
As logistics costs rise it becomes more important to manage the invoiced costs. Statistics show that shippers can save between 2.5 and 6% on their full transportation budget if they have full invoice control. Not all companies are sufficiently equipped to check invoices, as you either need a dedicated internal team, specialised software or an outsourced solution to do a freight audit well. What really can help is when you only have one rate card structure per mode of transportation instead of per carrier. When you are able to set the right rate structure before you start the tender, and let carriers quote to this structure, you will greatly simplify the potential audit of freight costs afterwards.
This article is sponsored by Freightender, the intuitive alternative to outdated procurement platforms
